BusinessMirror August 6, 2015

BusinessMirror

THREETIME ROTARY CLUB OF MANILA JOURNALISM AWARDEE 2006, 2010, 2012

U.N. MEDIA AWARD 2008

A broader look at today’s business Saturday 18,August 2014 Vol. No. 40Vol. 10 No. 301 Thursday, 6,102015

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P.  |     | 7 DAYS A WEEK

‘DEFLATION FEAR BASELESS DESPITE RECORDLOW 0.8PERCENT INFLATION IN JULY’

BSP still likely to keep rates T

INSIDE

HE Bangko Sentral ng Pilipinas (BSP) brushed aside on Wednesday notions of possible deflation in the immediate term and, instead, stressed the likelihood of within-target inflation this year no matter that the rate of change in prices in July has touched a 20-year low of 0.8 percent.

winning the first semifinal heat in 26.42. He bettered the mark of 26.62 set by Cameron van der Burgh of South Africa in the morning preliminaries. “Between me and Cameron it’s an amazing rivalry,” Peaty said. “We push each other to the limits.” It was the second men’s world record to fall at the worlds. Katie Ledecky of the United States made it five world records on the women’s side after taking down her own mark in winning the 1,500 freestyle final. “There are very few, if anyone, in the world who can do what Katie just did,” Franklin said. “It’s awesome to be here and be a witness.” Peaty also swam 26.62 at the European Championships in Berlin last August but that mark was not approved by world governing body Fina because he wasn’t tested for the blood-booster EPO.

AUSSIE DOMINATION

SEBASTIAN COE rushes to the defense of the embattled athletics federation. AP

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The Associated Press

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ONDON—Describing the latest doping allegations leveled against track and field as a “declaration of war,” Sebastian Coe rushed to the defense of the International Alliance of Athletics Associations (IAAF) drug-testing system on Tuesday and said it was time to “come out fighting” to protect the reputation of the sport. In an exclusive interview with the Associated Press (AP), Coe gave his first extensive comments following reports by German and British media outlets alleging that the IAAF had failed to act on suspicious blood tests involving hundreds of athletes over a 10-year period. “It is a declaration of war on my sport,” Coe, an IAAF vice president, told the AP. “I take pretty grave exception to that. This, for me, is a fairly seminal moment. There is nothing in our history of competence and integrity in drug-testing that warrants this kind of attack. We should not be cowering. We should come out fighting.” Just weeks before the world championships in Beijing, the sport was thrown into turmoil after German broadcaster ARD and The Sunday Times newspaper in Britain alleged that blood doping was rampant, citing test results from an IAAF database that were leaked by a whistle-blower. “Nobody should underestimate the anger at the way our sport has been portrayed,” said Coe, who is a candidate for IAAF president in elections later this month. “The fightback has to start here. We cannot be portrayed as a sport that is in any way dragging our heels.” The media reports examined the results of 12,000 blood tests involving 5,000 athletes from 2001 to 2012, and concluded that 800 were suspicious. The reports said that 146 medals—including 55 golds—in disciplines ranging from the 800 meters to the marathon at the Olympics and world championships were won by athletes who have recorded suspicious tests. “The use of that database, however it got into their possession, displayed either breathtaking ignorance or a level

The IAAF said the database was used for building up a record of blood profiles to use for target testing. Most of the samples were taken before the introduction of the biological passport program and cannot be used as proof of doping. “The use of this stuff, the sensationalizing, this is absolutely an attempt to destroy the reputation of the athletes and our sport,” Coe said. “Nobody is remotely suggesting that news organizations don’t have the right to question and challenge and kick the tires. But this selective use of this so-called information is just wrong.” Coe said the IAAF has been at the forefront of blood screening and out-of-competition testing for years. “We will not bend a knee to any other sport in the way we’ve led the way on this,” he said, noting that, since 2011, the IAAF has pursued 63 cases based on the biological passport program, with 39 athletes sanctioned so far. Coe is competing against pole vault great Sergei Bubka to succeed Lamine Diack as IAAF president. The election will be held in Beijing on August 19, ahead of the world championships from August 22 to 30. AP

of malevolence around a set of readings you can simply cannot extrapolate beyond,” Coe said. “The idea that my sport sat there either covering up wrongdoing or just being incompetent could not be wider of the mark.” Coe, the middle-distance great who organized the 2012 London Olympics, spoke to the AP on the same day as the IAAF issued a lengthy statement defending its procedures and calling the media allegations “sensationalist and confusing.” The ARD and The Sunday Times reports were based on analysis of the leaked test results by Australian antidoping scientists Robin Parisotto and Michael Ashenden. Coe questioned their credentials, saying, “These so-called experts—give me a break.” The IAAF has a commission of three independent experts who have tested and checked thousands of blood samples, Coe said. “I know who I would believe,” he said.

AZAN, Russia—Australia dominated the 100-meter backstroke events at the world swimming championships on Tuesday, winning the men’s title and going 1-2 in the women’s final. Two more world records fell on the third night of swimming at Kazan Arena, where a cool breeze swept through the stadium. Mitchell Larkin won the men’s 100 back in 52.40 seconds. He came into the championships with the top time in the world this year, having emerged at last year’s Commonwealth Games, where he earned silver in the 100 and gold in the 200 back. “The first thing that came into my head was,

‘DECLARATION OF WAR’

‘Wow. This is the moment. This is what you’ve dreamt of for so many years,’” Larkin said. “You can just get caught up in the circus, the lights, the sounds, the atmosphere, and here I sort of just took it in and enjoyed it, rather than thinking, ‘Oh my god, this is a world championships.’” Camille Lacourt of France was second in 52.48 and current Olympic champion Matt Grevers of the United States finished third in 52.66. Grevers won the world title two years ago. Emily Seebohm led a 1-2 finish for the Aussies in the women’s final, with all eight swimmers going under one minute. She won in 58.26 to earn her first individual gold at worlds, having finished second to American Missy Franklin in two years ago in Barcelona. “I touched the wall and I was just so excited,” Seebohm said. “I was like, ‘Oh my god, is that my name

with a one? Yes it is! Oh my god, I did it! I finally did it!’” Seebohm sang a country song in her head as she churned through the water. “It’s just about kicking arse and being a girl, so I thought it was very appropriate,” she said. Seebohm’s teammate, Madison Wilson, was second in 58.75 and Mie Oe Nielsen of Denmark was third in 58.86. Seebohm whipped out her camera phone to take a selfie of her and Wilson on deck with their medals. Franklin finished fifth in 59.40. “Definitely disappointed with the 100. Obviously, that’s not what I wanted to go,” she said. “But that’s where I am right now.” Britain enjoyed a banner night in the pool, too. James Guy defeated a strong field to win the 200 freestyle, outsprinting his idol Sun Yang of

China to the finish. Guy, the youngest swimmer in the final at age 19, touched first in one minute and 45.14 seconds. Sun settled for silver in 1:45.20 and world record holder Paul Biedermann of Germany earned bronze in 1:45.38. “He’s one of my heroes, so to race him head-tohead was amazing,” Guy said. “To touch my hand on the wall first and be world champion, it hasn’t sunk in yet, but I’m so happy.” It was Guy’s first career gold medal at worlds. He earned silver in the 400 freestyle on Sunday. American Ryan Lochte, the 2011 world champion, finished fourth in the first of his two individual events. Another Brit, Adam Peaty, followed Guy’s glory with a feat of his own. Peaty set a world record in the 50 breaststroke,

BusinessMirror

Sports

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| THURSDAY, AUGUST 6, 2015 mirror_sports@yahoo.com.ph sports@businessmirror.com.ph Editor: Jun Lomibao

THE US’s Katie Ledecky celebrates her world record in the women’s 1,500-meter freestyle, as Australia’s Mitchell Larkin plunges into the men’s 100 back competition. AP

“I’m not going to go into politics about it,” Peaty said. “Hopefully tomorrow it’s going to be a really great race. All I got to do is get my start right.” Van der Burgh won the second semifinal in 26.74, setting up Peaty and the South African for a head-tohead duel in Wednesday’s final of the non-Olympic event. Peaty already has gold from these championships, winning the 100 breast on Monday. Ledecky lowered her own world record by 2.23 seconds in defending her 1,500 free title. She touched in 15:25.48, improving her mark of 15:27.71 set in the preliminaries of the nonOlympic event on Monday. She and Franklin had tight turnarounds, with both women coming back to swim the 200 free semifinals. Franklin qualified second-fastest and Ledecky was sixth for Wednesday’s final.

AUSSIE DOMINATION

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This development strengthened the view the monetary authorities will keep the rate at which they borrow from or lend to banks where

they are at present, rather than ramp it up, consistent with the view that the US Federal Reserve (the Fed) is set to make appropriate ad-

justments in the world’s largest economy. In a statement on Wednesday, after the Philippine Statistics Authority (PSA) released the latest inflation numbers, BSP Governor Amando M. Tetangco Jr. said the sub-1 percent inflation in July should not be a threat to the 2-percent to 4-percent inflation target this year. July inflation averaged only 0.8 percent, representing a new 20-year low that, at the same time, helped fan fears of deflation. Inflation touched record lows the past three months owing to tame increments in food and oil prices, as well as the favorable impact of so-called statistical base effects from last year. Deflation, or reduction of the general level of prices, is bad because then it becomes harder for most businesses and C  A

‘EAT BULAGA’ D2

Show BusinessMirror

Thursday, August 6, 2015

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Creating characters and a new market: The wonderful case of ‘Eat Bulaga’ REELING

TITO GENOVA VALIENTE

titovaliente@yahoo.com

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HERE is a lovely story unfolding every day on free TV and it is happening on Eat Bulaga! on GMA. I do not hide the fact that Eat Bulaga! has had many missteps in the past, lapses in moral judgment and questionable taste. These past few days, however, the noontime show has not only discovered a new comic star but also raised the value of two of its mainstays to a hysterically unexpected level. Who has not yet heard of Yaya Dub? She is this charming and smart-looking girl who plays the role of caregiver to a wealthy, old woman. But if that is her role, TV viewers would not be talking about her. It is her persona that has triggered the notice of many fans: She speaks only through dubbed lines that range from songs to lines from films. The songs are either sung by male or female singers; the lines are from Filipino or foreign films. The lines that are played in response to a question from any of the other characters in this wild, wild show do not address anything. The words that come from the twisted lips of Yaya Dub do not make sense at all if one requires logic in TV conversation. But the dialogs on these programs are as contorted as the sounds from Yaya Dub. That makes sense. Yaya Dub is a masterful stroke at the lip-synch masters on other TV networks. Already, there are stalkers on the Internet and they are all looking for the real identity of this new comedienne whose style and humor don’t fit the template of the presentday female comics, who are weaned on the

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Today’s Horoscope

By Eugenia Last

CELEBRITIES BORN ON THIS IS DA DAY: Vera Farmiga, 42; Geri Halliwell, 43; M. Night Shyamalan, 45; Michelle Yeoh, 53. HAPPY BIRTHDAY: DA Stay cool no matter what DAY:

emotional challenges you face this year. It’s your steady pace and forward motion that will keep troublemakers at arm’s length. Go about your business and implement the changes that will help you get ahead personally and professionally. It’s time to walk away from the people who are holding you back. Your numbers are 4, 13, 27, 32, 39, 42.

stand-up comedy of gay bars and videokes. Yaya Dub is the result of all the technologies that have removed the primacy of the human voice in any kind of human communicative transaction. Who has not heard of Alden Richards? The last time I wrote about this young man was when I reviewed Adolf Alix’s short film, called Kinabukasan. The film stars Nora Aunor, whose genius in creating a palpable world of silence is legendary. Alden Richards is the other half of that story and he is competent and engaging. That seems like long ago now that girls are swooning and shrieking each time he appears on the other half of TV screen. The other half is occupied by this creature named Yaya Dub, and they are the new love team in the Philippines, more rabid and realistic than all the gooey love teams the medium has produced in a long time. The beginning of this love team was accidental, or at least that’s how it felt like the first time Alden Richards appeared and waved at Yaya Dub. Perhaps it was planned from the start, for seeming spontaneity has always been the magic of the Eat Bulaga! team. The relentless curiosity and frenetic friendliness of Jose, Wally and Paolo have led to this segment called “Problem Solving.” The flowering of a relationship, if you will, between a regular host all poised to be the most original matinee idol on TV and this beautifully demented caregiver has enabled the blossoming of the career of another comedian. Wally Bayola was for a spell banished

from Eat Bulaga! He figured in what people call a sex scandal. The comedian slowly crept back into the show but was humorless for weeks until he came back as Dr. Dora, a doctor-cum-salesman of medicine who bid good-bye because he was invited to a conference in Africa—and the TV public’s reception was just so. Wally came back as another character: a cantankerous doña with a face embedded with a luxuriously vindictive smirk, called Doña Nidora. Wally in this character channels all the delicious contravidas of yore—from Zeny Zabala to Bella Flores, from Rita Gomez to Celia Rodriguez. And in one episode, Manay Celia herself does make an appearance to confront the doña for copying her voice. At present, the old lady is in jail. The diary that will point to the reason the rich lola does not want her nanny to be involved

with Alden Richards is missing. It was taken by two thugs riding in tandem. We do not have any idea where this noontime tale will go. Let it be said that noontime shows will never be the same again. Improvisation is genius! The funny triumvirate of Wally, Alden and Yaya Dub create stories after stories that bring to the TV screen caper, kidnap, violence and bakbakan. It is a plot that has gone viral in the sense of being unstoppable. At certain points of Eat Bulaga! Bulaga!, we are shown the figures of Tito, Vic and Joey. They are seated like venerable judges looking down from some height as they appraise where their sense of pathos, bathos and humor has brought them. They must be certain of the controversies their other gimmicks in the past have

ARIES (March 21-April 19): Work on securing your future. Saving may not be your best skill, but now is a great time to get your personal papers together and invest in your future. Once you have your finances in order, everything else will fall into place.

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CANCER (June 21-July 22): You’ll get the help you need from a very unusual source. Don’t rule out any proposal that comes your way—the more unusual, the better. Let your intuition be your guide to a better life and future. Helping others will change your life.

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TAURUS (April 20-May 20): Don’t hide the way you feel. Get things out in the open and move on. Spinning your wheels or being stubborn will not solve anything. Make an effort to change what isn’t working for you. Avoid indulgence.

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VIRGO (Aug. 23-Sept. 22): Check your financial, legal or contractual papers for possible updates. You can bring about a change to your standard of living if you are careful with your expenditures. Cut costs and look for alternative ways to bring in extra cash.

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GEMINI (May 21-June 20): Fix up your home or use your place to entertain or network. It’s important to make positive changes that will bring you greater earning opportunities using the skills you enjoy the most. If you love what you do, you will be successful.

LEO (July 23-Aug. 22): Before you jump into action, make sure everyone your plans will affect is onboard. Using diplomacy will help you get what you need to turn your dreams into a reality. Romance is highlighted.

created. That should be all in the past. For the moment, their task or that of whose they have mentored is to raise the bar for other noontime shows that will remain “copycats.” The longer version of this putdown will be through those irrepressible grimaces of Yaya Dub. For the students of mass communications and marketing, observe how Eat Bulaga! has lured into the studio a new market. These are the pretty young ladies packing the studio. The reason for this new market is the competition involving eye candies, male lookers all bidding to be “bae.” Flippant but engaging, the show has fun with young men who take their pretty look so seriously it becomes a new pastime. Take it or leave it. The show is a barometer of the allure of celebrity in this land. n

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LIBRA (Sept. 23-Oct. 22): Don’t back away from taking care of other people’s affairs. You will gain knowledge that will help you with your own personal matters and also give you insight into how others are doing. You’ll be treated with greater respect.

CAPRICORN (Dec. 22-Jan. 19): Put some time aside to enjoy your home and family. Pampering is a necessity if you want to operate at your best. All work and no play will lead to frustration and loneliness. Don’t let impulse lead to senseless disputes.

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AQUARIUS (Jan. 20-Feb. 18): Don’t let your emotions take over, causing disruptions with friends, relatives or neighbors. Step away from any situation that appears to be explosive and channel your energy into offering fun ideas, affection and fond memories. Love conquers all.

SCORPIO (Oct. 23-Nov. 21): You will face opposition and overreaction from others. Step back and refuse to get dragged into situations that can only lead to loss or setbacks. Focus on learning and making personal changes that set you apart from those around you.

PISCES (Feb. 19-March 20): People you have worked with in the past or who owe you a favor will rally around you. A partnership looks promising and will lead to a prosperous venture. Don’t let uncertainty cause you to miss out.

BIRTHDAY DAY BABY: You are dynamic and playful. You are responsible, courageous and a born leader. DA

SHOW

‘the art of origami’ BY ROB LEE The Universal Crossword/Edited by Timothy E. Parker

ACROSS 1 Window sill 6 Mountain climber’s obstacle 10 Door fastener 14 At full throttle 15 A dollar, in some places

51 Caribou kin 52 Hold up 54 Vehicle for the off-road 55 Swords that are not dangerous 57 Bother persistently 59 Finishes camping

11 Warns of danger 12 Channel of the sea 13 Sheriff’s emergency assistants 18 Some forms of poetry 19 Big name in weed killers 22 Vigor go-with

56 Cheese tray choice 57 Polish, as one’s skills 58 Mr. Musial 60 Part of North America 61 Campaign pro 62 Dundee negative

PRICE: Average for the year through July is $53 a barrel, down 48 percent compared with the same period last year and on track for its lowest annual average since 2004. US crude inched up on Tuesday to $45.55 a barrel in afternoon trading, but it has fallen 20 percent in the past month. Reason: Huge increases in oil production in the US and Canada, along with sizable gains in Iraq and elsewhere, helped boost global supplies. Saudi Arabia and other Organization of the Petroleum Exporting Countries (Opec) nations kept pumping crude at high levels. Iranian crude could soon return to the market after being kept off by sanctions. Meanwhile, global demand for crude is not as strong as expected because China’s growth has cooled and other economies have become more energy efficient.

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‘GREY’ REVIEW Pages BusinessMirror

D4 Thursday, August 6, 2015

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‘BLACKOUT’: A DEEP, DARKHUMORED DRINKING MEMOIR THE dark memoir Blackout and its author Sarah Hepola

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HESE are perilous times for a writer to tackle the subject of women’s drinking, entwined as it’s become with the tripwire topics of rape and sexual consent. But in her memoir Blackout: Remembering the Things I Drank to Forget Forget, Sarah Hepola heads straight for the danger zone. Her story opens with a Paris magazine assignment, which is, she assures us, “exactly as great as it sounds.” That is, until it’s not. Her final cognac-infused night in the city ends with her waking in a stranger’s bed and no memory of how she got there. And yet, aware as she is of the feminist view that this is, by definition, rape, Hepola can’t quite get there. She’s on top and “making all the right sounds,” and at the end she weaves her legs through his—an active participant. She has no idea who he is, but “he has kind eyes.” This is just one example of how Hepola refuses to uncomplicate the complicated, one of her memoir’s greatest strengths. Yes, we see the familiar recovery story arc—I drank too much, I hit bottom, I found AA—but with it comes a deep dive into the shame, fear and perfectionism that tilt so many women toward defiant self-destruction with the goal of annihilating

the confused, flawed self to emerge different, better. Invincible. Reflecting on the fantasies that suffused her drinking years, a newly sober Hepola comes to see that they “all had one thing in common: I was always someone else in them.” As Hepola notes, alcoholism stems from a genetic predisposition triggered by circumstance, and early on, she attempts to trace her path from childhood to that stranger’s Paris bed. The markers are familiar: Lifelong feelings of not having or being enough (fueled by her family’s outsider status in the wealthy Dallas neighborhood where she grew up), a preternatural sensitivity combined with secrecy and self-absorption, and an early attraction to alcohol itself—she was only 7 when she started sneaking sips of leftover beers, and her first experience of being drunk (and first blackout) came just two weeks before her 12th birthday. This would be the first of countless times she came to with “a blank space where pivotal scenes should be.” For all the wresting with hard truths, Hepola is a funny writer, and the book is shot through with a black humor that will be familiar to her readers on Salon.com where she is the personal essays editor. In one scene, on the way to a football game with college friends, a three-sheets-to-the-wind Hepola gets it into her head to moon passing cars. In a traffic snarl on the interstate. In broad daylight. Which, as she puts it, is “a little bit like

mooning someone and then being stuck in a grocery line with them for the next 10 minutes. Hey, how’s it going? Yeah, sorry our friend is mooning you right now, she’s really drunk. Excited about the game?” Hepola describes getting sober in her 30s as “the first true act of my adulthood,” but she leaves no doubt about just how hard such a change can be. She hides out in the closet of her 250-square-foot studio apartment. She struggles with AA (there’s a whole chapter titled “Isn’t There Another Way?”), with binge eating and dieting (which unleashes yet another torrent of inner conflict), and with the seemingly unimaginable notion of kissing, let alone sex, without alcohol. Storytelling has been a mainstay of modern recovery ever since the 1939 publication of The Big Book of Alcoholics Anonymous, the alchemy by which the worst moments of a drinker’s life transmute into the sources of life’s deepest meaning. Ultimately this is where Hepola, too, finds solace and hope. Having once used alcohol to break down writer’s block, writing becomes the means by which she grounds herself in sobriety, making sense of the puzzle pieces of her past, and forging a new life built on honesty and meaningful connections. At one point, Hepola wonders if different life circumstances might have stopped her from becoming an alcoholic and concludes that she can’t know, which points to an issue that I struggled with at times. So many

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HESE days it seems whatever can be burned to power a car, heat a home, make electricity or ship people and goods around the globe is being sold at bargain basement prices. Prices for coal, natural gas, oil and the fuels made from crude, such as gasoline and diesel, are all far less expensive than they have been in recent years. Consumers are rejoicing. Fossil-fuel companies are reeling. Countries that import energy, such as the US, China, Japan and those in the European Union, are getting an economic boost. Exporters, such as Russia, Saudi Arabia and Venezuela, are facing lower income and budget shortfalls. The possible effect of cheap fossil fuels on the environment is unclear—low prices certainly make them more tempting to burn, but low prices can also help discourage exploration in sensitive locations and open the way for environment-friendly policies. The recent price declines are a result of complex factors that have led to a simple outcome: There is more than enough fossil fuels at the ready than customers need. “We just have too much energy hitting the world,” says Suzanne Minter, manager for oil and gas consulting at Bentek Energy, a division of Platts.

Crude oil

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SAGITTARIUS (Nov. 22-Dec. 21): Focus on what needs to be done. Too much is on the line for you to ignore a chance to learn and advance. Participate in events that will put you in the spotlight and show off your strengths.

FIRE SALE ON STUFF THAT BURNS: COAL, OIL, NATGAS DOWN

data points and side trips to map a chain of cause and effect that will always be something of a mystery. While true to the experience of getting sober (and I speak from my own), the cost is an occasional loss of narrative momentum. To take one example, did prolonged breastfeeding, until she entered kindergarten, pave the way to Hepola’s drinking career? It’s an idea that’s floated, then gone, more distraction than illumination. But this is a quibble with what is both a riveting coming-of-age story and an important contribution to the growing body of writing about women and drinking with entries, including Charlotte Davis Kasl’s pioneering Many Roads, One Journey: Moving Beyond the 12 Steps, the late Caroline Knapp’s luminous 1996 memoir, Drinking: A Love Story (which Hepola read three times before getting sober, a glass of white wine in hand), and more recently, Ann Dowsett Johnston’s heartfelt and heavily researched Drink: The Intimate Relationship Between Women and Alcohol. In her introduction, Hepola quips that she could be said to have written a satire of memoir, focused as it is on events she can’t remember. In fact, she recalls a stunning amount. While few may share Hepola’s experiences with blackout drinking, many are likely to identify with the complex of feelings behind it. In this account of the years when she felt most alone, she reminds us that we are not. n

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‘Grey’ review: ‘Fifty Shades’ sequel gives new perspective B M W | Newsday Grey: Fifty Shades of Grey as Told by Christian E.L. James Vintage, 576 pp. THE release of Grey Grey, the fourth book in the Fifty Shades series, coincided with the character’s birthday. But which birthday is it? Christian Grey began life in Twilight fan fiction as vampire Edward Cullen (back when author E.L. James was known as Snowqueens Icedragon), so the guy is 1,468, for all we know. Grey turns back the clock to when the two main characters first meet and rehashes the original book from his point of view. That was when Grey was the best-looking 27-year-old billionaire child-abuse survivor in Seattle and Anastasia Steele was a 21-year-old virgin interviewing him for her college newspaper. When we last saw the couple in Fifty Shades Freed, pregnancy and toddlers had been added to the familiar landscape of whips, restraints and luxury vehicles. The previous books were told from Ana’s perspective, with frequent recourse to italicized inner monologue and her “inner goddess.” Now it’s Christian—a man who makes Dr. Seuss’ Lorax look like a realistic character—whose running commentary we are privileged to hear. The 576-page narrative covers the same territory as Fifty Shades of Grey—one month, which ends with an overenthusiastic caning session that leads Ana to give up her dreams of a happy future with Christian. The familiar plot points and sex scenes are retold in the new book, but this time with a close-up look at Grey’s transformation from a steely dominator into a smitten pussycat. The CEO’s go-to thoughts about riding crops and shackles are intermingled with disturbingly mushy ones. Ana’s eyes are “the color of the ocean at Cabo, the bluest of blue seas. I should take her there.... Where did that come from?” he thinks, horrified. Throughout the month, Grey’s subconscious is working overtime, giving him dream after dream about his dark past to help him move past his aversion to touch and his inability to love. Burned with cigarettes and beaten by his drug-addicted prostitute mother’s pimp, he was left for days with her dead body after she committed suicide. At age 15, Grey became the sex slave of a female friend of his adoptive mom. There were a few of these dream sequences in the earlier books; sadly, there are many more here. Like its predecessors, this is not a book that can stand up to serious criticism—literary, psychological or otherwise. But Grey is for the fans, not the critics. As the man himself puts it, “I need this. This is what I do. And we’re finally here.”

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ALL-NEW CELERIO Suzuki Philippines launches the all-new Celerio, featuring an A+ compact build, which is a concept that steps up on the strengths and exceeds the limits of the A segment car by implementing the “small on the outside, big on the inside” idea. The launch was held at the Bellevue Hotel in Alabang, Muntinlupa City. In photo are (from left) Suzuki Philippines General Manager for Automobile Shuzo Hoshikura, BUSINESSMIRROR Publisher T. Anthony Cabangon, Suzuki Philippines President Hiroshi Suzuki and Suzuki Philippines Managing Director Norminio Mojica with the Cerulean Blue Suzuki Celerio. See story on B1. ALYSA SALEN

Gozon: We have right to keep Ang’s ₧1B GOZON: “The Gozon group did not defraud Mr. Ang. Neither did [it] misappropriate any ‘money contributed by stockholders, or members of rural banks, cooperative, samahang nayon, or farmers association, or of funds solicited by corporations or associations from the general public’—an element of syndicated estafa.”

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HILE the camp of businessman Ramon S. Ang claims to being swindled to the tune of P1 billion as a result of the botched acquisition of a significant minority stake in GMA Network Inc., his newly gained foe, Felipe L. Gozon, contends that he is actually the victim in this case. Gozon, the chairman of the

PESO EXCHANGE RATES n US 45.7220

broadcasting network, broke his silence on Wednesday afternoon, after a two-day silence on the syndicated estafa case filed against him and several other executives, claiming that he rightfully owns the money due to damages. This assertion, he said, is backed by the June 23 Term Sheet that the two parties signed to start their negotiations. He claimed that the said document provides for ramifications

on damages and lost opportunities. “The P1 billion is intact and has not been used. The Gozon group has the right to retain it to answer for its claims for damages against Mr. Ang, among others, for opportunity loss, pursuant to law and the Term Sheet, as Mr. Ang prevented the transaction from conclusion and closing, by his unilateral decision not to proceed with the transaction C  A

n JAPAN 0.3678 n UK 71.2029 n HK 5.8969 n CHINA 7.3631 n SINGAPORE 33.1295 n AUSTRALIA 33.9310 n EU 49.7821 n SAUDI ARABIA 12.1932 Source: BSP (5 August 2015)

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News

BusinessMirror

Thursday, August 6, 2015

Gozon: We have right to keep Ang’s ₧1B. . .

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and his imposition of new conditions after the purchase contract was perfected on March 21. As there is a valid and just reason for the retention of the down payment, there is no estafa,” he explained on Wednesday. Ang sued Gozon’s group for refusing to return his P1-billion down payment for the share-purchase transaction that involves the acquisition of a 34-percent stake in the broadcasting network. But for Gozon, the elements of a syndicated-estafa case were absent in the lawsuit. “The Gozon group did not defraud Mr. Ang. Neither did [it] misappropriate any ‘money contributed by stockholders, or members of rural banks, cooperative, samahang nayon, or farmers association, or of funds solicited by corporations or associations from the general public’—an element of syndicated estafa,” Gozon, a lawyer, said. T he other parties for ming the triumvirate of GMA were spared from the case, as they signified their intention to return Ang’s down payment. This prompted Gozon to say that the Jimenez and Duavit families have “special relationships” with the COO of San Miguel Corp. “The Jimenez group and Duavit group have waived their rights and interests over their shares in the down payment, have expressed willingness to return such shares that may be due them, and did not want to participate in any dispute or litigation over the down payment. [I] understand

their special relationships with Mr. Ang,” he said. As of press time, Gozon’s camp has yet to receive a copy of the lawsuit, while Ang refused to give a comment. Talks on the possible acquisition of a stake in the broadcasting network started years ago. Several suitors tried to offer competitive prices for the transaction, including Philippine Long Distance Telephone Co. (PLDT) Chairman Manuel V. Pangilinan. But negotiations between the two parties expired in March 2014, marred by regulatory and pricing issues. Pangilinan’s group is still interested in the network, but the prospect of acquiring shares in GMA will have to wait until he is done taking PLDT back on the saddle. PLDT suffered from declining revenues and higher costs during the first half of the year. “There are no discussions yet, but I think, for the moment, we will be focusing first on PLDT,” he said in an interview. He declined to say whether his group was spooked by the lawsuit filed against Gozon. First Grade Holdings Inc. Managing Director Astro C. del Castillo said the case will likely weigh on the network as a whole, even if it was lodged against the camp of its chief executive only. “Definitely, it could have a negative effect on the shares of GMA,” he said. “Interested or future investors will be spooked if the case will be prolonged.”

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BSP still likely to keep rates. . . households to pay back debt, for instance. Real interest rates also rise in period of deflation when it becomes less attractive for entrepreneurs to invest or borrow. The 0.8-percent inflation in July brought the average in the first seven months to 1.9 percent, or a tad lower than the low end of the target for the year of 2 percent. Tetangco hinted broadly that, while inflation will likely fall below 2 percent in the immediate term, he remains “confident that the full-year averages over the policy horizon will be kept within the target range, albeit close to the lower end.” “Liquidity remains ample and credit growth continues at a steady pace. We will monitor these developments, especially those from external sources that may raise volatility in financial markets or impact on inflation expectations,” Tetangco said. “We will see at our meeting next week if there is need for any adjustments to our stance of policy,” he added. Bank of the Philippine Islands (BPI) research officer Nicholas Antonio Mapa said the BSP will likely keep the monetary-policy settings where they are at present when they meet

to decide next week where interest rates will likely tread over the next 18 to 24 months down the line. He quickly added that the BSP has room to cut the banks’ reserve requirement ratio (RRR) “eventually,” as inflation falls lower. Mapa also said the August inflation outturn should still prove lower than the rate in July, due to statistical base effects and as food remains in disinflation with the government decision to import the rice staple. “We may see inflation trend higher after that as inflation feels the bite of El Niño and as base effects from the low oil prices washes out,” Mapa said. Inflation peaked in July and August last year at 4.9 percent. Bloomberg reported the Philippine peso was set for the weakest close in five years on capital-outflow concerns, amid speculation recordlow inflation will dissuade the central bank from following the Fed when it raises interest rates. Inflation eased to 0.8 percent in July, the least since at least 1998. This puts the year’s average at 1.9 percent, below the central bank’s target of 2 percent to 4 percent. The

BSP will meet on August 13 and see if there’s a need to adjust policy, Tetangco said in a mobile-phone message on Wednesday. “While I don’t see the central bank cutting its policy rate or even the reserve requirement as inflation will normalize in the coming months, I don’t see think it will be in a rush to raise rates either after the Fed liftoff,” said Steven Reyes, senior vice president for commercial trading and sales at Rizal Commercial Banking Corp. in Manila. The peso fell 0.3 percent to 45.75 a dollar at the midday break in Manila, prices from Bankers Association of the Philippines show. The currency is headed for the lowest close since July 28, 2010, when it finished the day at 45.9. The Philippine central bank held its benchmark interest rate for a sixth straight meeting in June after the economy grew at the weakest pace in more than three years. A steady monetary-policy stance against a backdrop of rising US interest rates could keep the peso weak. “When the US starts increasing interest rate and the BSP doesn’t do

the same thing for whatever reason, money could flow out,” said Toto Hilado, chief operating officer and in charge of markets at East West Banking Corp. in Manila. There is no risk of deflation as domestic demand remains robust, BSP Deputy Governor for the Monetary Stability Sector Diwa C. Guinigundo said in an August 1 e-mail. The growth slowdown in the first quarter was caused by anemic government spending and isn’t something that the central bank can address, Rizal Bank’s Reyes said. The BSP may keep its key interest rate unchanged at least at next week’s meeting, said Joey Cuyegkeng, an economist at ING Groep NV in Manila. He cited a potentially intense and extended El Niño, increased market volatility and improved economic growth in the second quarter as reasons the BSP probably won’t cut rates this month. The yield on the nation’s 10-year government bonds fell 11 basis points to 4.19 percent, the lowest since April 29, according to mid-day prices from the Philippine Dealing & Exchange Corp.

Fire sale on stuff that burns: Coal, oil, natgas down. . . Fuels

Gasoline: The average US retail price is down 30 percent through the first half of the year. It is now $2.64 a gallon, according to AAA, lower for this time of year than any other year over the last decade except 2009. Diesel and heating oil: Average retail pricesforbotharedown 27percent.Reason:Whenoil pricesfall,thecostforrefinerstoturnitintopetroleum

products and fuels goes down. US refineries have been running at full strength, and big new refineries in Saudi Arabia and elsewhere have added to global supplies of fuels.

Natural gas

Futures: US futures have averaged $2.77 per thousand cubic feet through the first half of the year, 40 percent lower than last year.

Residential prices: Averaged 9 percent lower through the first half of the year. For the full year, natural gas is expected to average $10.27 per thousand cubic feet, the lowest since 2003, according to the energy department. Reason: US production is strong. Relatively mild weather has tempered demand for heating and electric power plants. Around the world, natural gas prices have also fallen because

Continued from A1

Continued from A1

they are often linked to the price of crude and production of liquefied natural gas that can be shipped overseas is ramping up.

Coal

Price: The average price of coal used for electricity from Central Appalachia is 20 percent lower than last year, according to Platts. In June the price hit an eight-year low. AP

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The Nation BusinessMirror

Watchdog tells military chief: Reform human-rights office

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HUMAN-RIGHTS watchdog on Wednesday asked the Armed Forces chief of staff, Gen. Hernando Irriberi, to make sure that all military personnel who violate international humanitarian law and covenants on civil and political rights are punished. In a letter to Irriberi, the New York-based Human Rights Watch (HRW) said the new military chief must also respect the provisions of the Safe Schools Declaration, which has been signed by 47 countries. The letter was signed by HRW Asia Deputy Director Phelim Kine. HRW’s plea came in the wake of the closure of schools catering to tribal children in Mindanao allegedly by the military and the Department of Education on the pretext that they were being operated by the New People’s Army. Worse, these schools, which serve remote communities, have been transformed into camps by Army troops and militiamen, HRW said. The Safe Schools Declaration, HRW explained, is a political commitment to do more to protect students, teachers and schools from the negative consequences of armed conflict. HRW also asked Irriberi to rein in paramilitary groups that are under the command and control of the Armed Forces, many of whose members have long been responsible for serious human-rights abuses.

“Until such abusive units are disarmed and disbanded, the Armed Forces will be responsible for ensuring that they act in accordance with the law,” HRW added. It also sought reforms at the Armed Forces Human Rights Office “since it has not lived up to its mandate and responsibilities.” Irriberi should issue a clear policy declaration regarding the importance of this office to promote and protect human rights, the group said. “General Iriberri has the time and the opportunity to make greater respect for human rights a priority of the Philippine Armed Forces,” Kine said. “It is long overdue for the Philippine military to deliver on its human-rights rhetoric.” “General Iriberri is now the point man for making sure the Philippine Armed Forces stop committing abuses and respect human rights,” he added. “It is his responsibility to ensure the military meets its international legal obligations throughout the Philippine archipelago.” HRW asked Iriberri to investigate and punish military personnel implicated in the harassment of activists, including those engaged in Red-baiting, the practice of publicly smearing government critics as state enemies. In many instances, such harassment led to the arrest, torture and even killing of the military targets, it said.

Editor: Dionisio L. Pelayo • Thursday, August 6, 2015 A3

Losing senatorial CA stops MMDA’s antismoking drive bet fails to file protest against Poe By Joel R. San Juan

A

By Jovee Marie N. dela Cruz

SENATORIAL candidate who lost in the past two senatorial elections on Wednesday attempted to file a case to unseat Sen. Grace Poe but failed because he did not have the P50,000 filing fee.

Rizalito David, who lost in 2010 and 2013 senatorial elections, failed to file a quo warranto petition before the Senate Electoral Tribunal. “I don’t have P50,000 right now,” David said when he was asked to pay the P50,000 filing fee, saying, “This is the cost of justice.” David said he was aware that he has to pay a filing fee but said he did not expect it to be P50,000. David said that Poe should be unseated owing to her citizenship. He argued that Poe is not a natural-born citizen and the senator was once an US citizen, adding “she was using an American passport since 2009.” In addition, David said that Poe, who topped the 2013 senatorial elections, is a “foundling” or stateless and

could be unseated as a member of the Senate for not being a “naturalborn Filipino.” Poe was reportedly abandoned in a church in Iloilo and was later adopted by actor Fernando Poe Jr. and actress Susan Roces. David added that he was planning to return to the Senate Electoral Tribunal on Thursday to file again his complaint against Poe. Article VII, Section 2 of the Constitution states that “no person may be elected President unless he is a natural-born citizen of the Philippines, a registered voter, able to read and write, at least 40 years of age on the day of the election, and a resident of the Philippines for at least 10 years immediately preceding such election.”

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HE Court of Appeals (CA) has barred the Metropolitan Manila Development Authority (MMDA) from conducting an antismoking campaign on the ground of lack of authority. In a 16-page decision written by Associate Justice Maria Elisa Sempio Diy, the CA’s Twelfth Division affirmed the May 20, 2013, decision issued by the Regional Trial Court (RTC) in Mandaluyong City which directed MMDA Chairman Francis N. Tolentino and his personnel from implementing the provisions of Republic Act (RA) 9211, otherwise known as Tobacco Regulation Act of 2003, and its implementing rules. The appellate court junked the petition filed by the MMDA seeking the nullification of the ruling of the RTC in Mandaluyong. It did not give weight to the claim of Tolentino that it is vested by RA 7924, which created the MMDA, with authority to implement laws and ordinances relating to the protection of the environment and public. Specifically, the MMDA cited Sections 2, 3(f) and 9 of RA 7924, which allows the agency to exercise “regulatory and supervisory” authority over the delivery of Metro-wide services which have Metro-wide impact. These services include health and sanitation, urban protection

and pollution control. However, the CA pointed out that Section 29 of RA 9211 provides that the Interagency Committee-Tobacco (IAC-Tobacco) has the exclusive power and functions to implement and administer the provisions of such act. Among the members of the IACTobacco are the heads of the departments of Agriculture, Justice, Environment and Natural Resources, Science and Technology, Education, administrator of National Tobacco Administration, a representative from the tobacco industry to be nominated by the legitimate and recognized associations of the industry, and a representative from a non-governmental organization involved in public-health promotion nominated by the Department of Health in consultation with the concerned groups. In addition, the CA said even the antismoking ordinances of the local government units do not give the MMDA the power and authority to implement such ordinances. The case stemmed from the complaint filed by Anthony Clemente and Vrianne Lamsen who were caught smoking in front of Farmer’s Plaza Market in Cubao, Quezon City. The two were ordered to pay a fine of P500 each and warned that they will be forced to render community service or be imprisoned if they fail to pay the amount.

TheBroa

Business

A4 Thursday, August 6, 2015

THE CARROT&STIC F

By Rene Acosta, Butch Fernandez, Jovee Marie dela Cruz, Catherine Pillas & Recto Mercene

or the country, two things are at stake in the West Philippine Sea (South China Sea) dispute: Sovereignty or territorial integrity, and the vast oil wealth beneath its waters. For other countries, such as the United States and Japan, it is maritime security and regional domination.

But for defeatists, even if the Philippines would win its case against China before the Arbitral Tribunal, China will no longer leave the seven reefs that it is reclaiming within the country’s territory, unless it is booted out by force, meaning militarily. But, while the battle is still in the rhetoric stage, Beijing appears to be using a subliminal carrot-andstick approach in dealing with Manila—with trade and investment being the carrot, and military buildup in the disputed areas as the stick.

Buying time

This is one way to buy time while China awaits the change in administration in 2016, hoping that President Aquino’s successor would be “friendly” to Beijing, observers say. Party-list Rep. Jonathan de la Cruz of Abakada said he was told that the Chinese government is ready to renew its relations with the incoming administration. “I am told that the Chinese government is looking forward to a proper and responsible renewal of friendly relations with the next administration, [and] they will content themselves with the usual niceties with [President Aquino],” de la Cruz said, quoting his sources, who are senior Chinese officials visiting the country. For now, however, President Aquino remains “resolute” in advocating a “principled foreign policy” on the issue. And Mr. Aquino is hoping the next administration will pursue this path with even greater vigor, especially with the support of three international blocs—the Association of Southeast Asian Nations (Asean), the European Union and Group of Seven, including Japan and the US—for the country’s rules-based countercampaign against Chinese aggression in the West Philippine Sea. Communications Secretary Herminio B. Coloma Jr. noted the latest positive developments in the maritime row in the ongoing Asean foreign ministers’ meeting in Kuala Lumpur. There, he said, “an emerging consensus” has formed behind the Philippines’s call for “a halt in reclamation, halt in construction and halt in aggressive actions that could further heighten tensions.” Beyond Asean, Coloma added, “the European community, and the G7 countries, including the US and Japan, have expressed solidarity.” According to Coloma, such salutary development vindicates Manila’s persistence in treading the peaceful, rules-based foreign policy in dealing with intractable issues that, if mishandled, could spark armed conflict in a zone deemed vital to global commerce. An estimated one-half of global shipborne trade passes through the sealanes involved in China’s row with its neighbors, the most vocal of which are the Philippines and Vietnam. President Aquino, Coloma stressed on Wednesday, “is resolute in advocating continuity of principled foreign policy: a rule-based approach anchored upon international law and the primacy of attaining regional peace and stability.” Such an approach “has gained broad-based support from Asean,” Coloma said, adding that it is, thus, “imperative that the next President and administration carry on with even greater

determination so that the principle of ‘right is might’ will prevail.”

Military response

The reclamation and development into artificial islands of the Kagiti­ ngan Reef, Calderon Reef, Burgos Reef, Mabini Reef, McKeenan Reef, Panga­niban Reef and Zamora Reef, or Subi Reef, is being coupled by the construction of ports, runways and up to six-story buildings for Chinese military use. Despite the huge security challenge, the Armed Forces is waging its own “calibrated” response in pursuit of its mandate of defending the territory, and the answer was a combination of diplomatic efforts by way of the Executive department, and building its capabilities through the acquisition of assets and equipment. The modernization of the military was being moved and even hastened despite the statement of Senior Associate Justice Antonio T. Carpio that, militarily, the country cannot challenge China, which is hell-bent on using its might in its territorial encroachments in the West Philippine Sea. Carpio, who recently briefed employees of the Department of National Defense on the territorial issues in the disputed territory, said even diplomatic efforts “proved fruitless,” thus, leaving the country the only option of bringing Beijing to international arbitration, which China is not recognizing. The magistrate said the country cannot even invoke the existing Mutual Defense Treaty with the US, which has been strongly vocal against China’s activities in the West Philippine Sea, but whose concerns and criticisms are being dismissed by Beijing, because the US does not take sides in territorial tiffs. But the military said diplomatic efforts, the arbitration and its beefing up of its capabilities through the acquisition of assets and equipment are part of its interlocking strategy in dealing with China’s occupation of the country’s territory and its advance in the West Philippine Sea. The reclamation and occupation of the seven reefs, which are within the Philippines’s exclusive economic zones, even hastened the modernization of the military, which, upon its completion, should have equipped the Air Force with fighter jets, radars and attack helicopters, and the Navy with frigates and other vessels. The Philippines is also probably using the diplomatic efforts and arbitration to buy its military the needed time to pursue its modest modernization, never to defeat China, but at least withstand Beijing’s first wave of attacks should it decide to use force in keeping up its “annexed” territory, or in encroaching deeper into the country’s territory.

China wants 86 percent

The military’s security trouble with China began after Beijing issued and pushed its nine-dash line map, which covered 85.7 percent of the entire West Philippine Sea, or an equivalent of 3 million square kilometers out of the 3.5-million-sq-m surface area of the West Philippine Sea. China’s new delineation cut through Malampaya, the Philip-

pines’s largest operating gas field that supplies 40 percent of the energy requirement of Luzon, in Palawan, and moved China’s boundary within less than a kilometer away from Batanes, Ilocos Norte and even Palawan, taking away at least 70 percent of the country’s territorial waters. The map bestowed on China the maritime control over the West Philippine Sea, where half of the world’s oceangoing trade, valued at $5.3 trillion annually, passes through, raising concerns from other countries, including Japan and the US. For one, seaborne trade to Japan passes through the West Philippine Sea, and if China will control the water, Japan-bound ships will have to go through the circuitous and unsecured Luzon Straight. On the other hand, the US maintained that the West Philippine Sea is an international water, and it should remain that way so it will not restrict overflight and international navigation in the area. While China is working double time to complete its reclamation and putting up structures, the military remained helpless in checking it. The only thing it can do is to continue undertaking its patrols, but which are even being subjected to harassments or “challenges” by Chinese paramilitary and military vessels. The military’s hands were tied by the “status quo” ordered by President Aquino, which restricted soldiers from undertaking actions that could otherwise provoke China. The order even prohibited the military from rehabilitating its existing structures in the West Philippine Sea. The status quo is clamped down until the international arbitration against China is decided.

Collective defense

Aside from building its capabilities and vainly waiting for the results of the arbitration, the military is also building up and strengthening its defense alliances with its allies. The “collective defense” was a key factor in warding off China’s further belligerent behavior in the territory that it was disputing. “The whole of Asean is a very strong voice if it can come together, much more if the whole of Asia,” said military spokesman Col. Restituto Padilla. Manila signed last year the Expanded Defense Cooperation Agreement (Edca) with the US, which will allow American troops and their equipment to rotate in the country. It has been questioned, however, by various groups before the Supreme Court, where it currently pends for review. Defense Secretary Voltaire Gazmin has said the Edca forms part of the defense strategy of the country, and its junking will “forever alter” the security landscape of the Philippines.

Two-faced policy

Nationalist People’s Coalition Rep. Sherwin Gatchalian of Valenzuela said China’s continuing reclamation activities in the contested West Philippine Sea show its twofaced policy in managing foreign relations with its neighbors. Gatchalian maintained that the ongoing reclamation activities by China in the Philippines’s very

In this March 30, 2014, file photo, Philippine Marines raise the Philippine flag on the first day of their deployment on the dilapidated navy ship LT57 BRP Sierra Madre at the disputed Second Thomas Shoal, locally known as Ayungin Shoal, off the West Philippine Sea. AP/Bullit Marquez

own territory “threaten to disturb the status quo and the peace in the region,” saying that the next administration should strengthen its legal actions against the activities. “They [Chinese] have been consistent in pushing for bilateral negotiations. But I think our country has already taken the legal track. We have advantage here. We just need to make sure that our legal tend is solid,” Gatchalian said. Senior Deputy Minority Leader Rep. Neri Colmenares of Bayan Muna said the government should not abandon its tribunal cases as requested by China. “China has demanded that we abandon our tribunal cases and limit ourselves to bilateral talks, which is unacceptable. The Aquino [administration] has publicly announced it is not willing to talk bilaterally with China. This is the reason China is pressing on with its land-grabbing activities with full force,” he said. “I also believe that we can have talks with China if only to protest its expansion, but without abandoning our tribunal case and other multilateral actions.” Party-list Rep. Sherwin Tugna of Cibac said he believes that China will not negotiate based on a rule of law. “It will merely use brute force and might against smaller nations. Unless the international community acts against it and issues an embargo against China, it will continue occupying territories that it does not own.” For Party-list Rep. Terry Ridon of Kabataan, the Philippine government should negotiate from a position of strength. “We should continue to strengthen our position without falling into the incorrect view that what is ultimately needed is US intervention into the West Philippine Sea question. With the extreme posturing of Mr. Aquino toward the US as the savior on the West Philippine Sea question, I have serious doubts whether talks can proceed toward any conclusion,” he said. Party-list Rep. Francisco Ashley Acedillo of Magdalo said China now has structures in Gaven Reef, Fiery Cross or Kagitingan Reef, Chigua Reef, Johnson Reef, Cuarteron Reef or Calderon Reef, Zamora Reef or Subi Reef, and Mischief Reef or Panganiban Reef, all

located in the West Philippine Sea. “[These structures] will prove to you just how massive, how fast and how serious the Chinese are— not only in physically altering the landscape and seascape of the West Philippine Sea, but also changing the narrative of countries surrounding this body of water—including the Philippines,” Acedillo said. He said that “given China’s propensity to plan out and execute [its] strategies in the long term, I don’t see them engaging the Aquino administration for any perceived short-term gain.” The West Philippine Sea is one of the Earth’s most productive fishing zones in terms of its annual maritime catch, representing about 10 percent of the world’s total take. It contributes about half of the fish eaten in the Philippines, Vietnam and China, especially in poorer coastal areas.

Trade, investment partners

China’s standing as a top trading and investment partner of the Philippines, as well as of other Asean nations, makes it more difficult for Manila to just severe its ties with Beijing. According to data from the National Statistics and Coordinating Board, in 2014 China is the country’s sixth top investment partner. In 2013 China’s approved investment in the country was at P1.2 billion, which ballooned to P11.4 billion in 2014. This was 6.1 percent of the P186-billion investment from overseas for that year.

In terms of trade, China was the third top export market of the Philippines in 2014, with shipments valued at $8 billion (mostly electronics). It also remains as the top import source, with merchandise imports valued at $9.5 billion in the same year (also mostly electronic products). Overall China is the Philippines’s second-largest trading partner next to Japan in 2014. Private- and public-sector officials say trade and investment relations are unaffected by the dispute at this time. Dr. Francis K. Chua, president emeritus of the Philippine Chamber of Commerce and Industry, said a Chinese government-controlled steel-trading company is looking to set up shop in the Philippines. Chua said business groups from China continue to visit despite the ongoing row over the West Philippine Sea. “They said there is a difference between the political issue and business. So, as far as they are concerned, it’s business as usual. This is a government unit looking at investment opportunities here,” Chua said. Trade Secretary Gregory L. Domingo also said trade relations with China are not affected by the developments in the territorial dispute.

AIIB

In June President Aquino expressed cautious words in joining a newly formed, China-led bank—the Asian Infrastructure Investment Bank

aderLook

sMirror

www.businessmirror.com.ph | Thursday, August 6, 2015

a5

CK IN THE SEA ROW The senators’ take

n Sen. Ferdinand R. Marcos Jr.: “I don’t think there will be further repercussions. The decision of the Philippines has been made very clear. And it is just a restatement of that position. We instigate action for assistance in the issue in the West Philippine Sea. Kung ano’ng maging reaction ng mga ibang bansa, hindi natin malalaman, pero sana nga sila ay magsalita at tulungan tayo sa mga problemang hinaharap natin dito.” n Sen. Sergio R. Osmeña III: “We have to do it [filing of case against China], we have to back up the President on foreign matters, huwag tayong mag-away-away; dapat maging buo ang ating position.”

CHINA

Territorial waters claimed by China

Hong Kong

Hanoi

a

U.N. 200 nautical mile exclusive economic zone

HAINAN e

Disputed islands

a

LAOS

Scarborough Shoal

n

THAILAND

S

Paracel Islands

h

i

VIETNAM

PAGASA ISLAND

C

CAMBODIA

Ho Chi Minh City

h t u

o

S

Spratly Islands

PALAWAN (PHILIPPINES) 200 km 200 miles

MALAYSIA

BRUNEI Source: U.S. State Department, CIA World Factbook, Javier Zarracina, Lou Spirito - Los Angeles Times Graphic: Tribune News Service

(AIIB). “I think it behooves our sense of fiscal responsibility to look at how the governance structure of the AIIB will be, so that the economic help that is supposed to be afforded will not be subjected to vagaries of politics between our countries and the lead proponent.” The AIIB is the embodiment of China’s aggressive campaign to exert economic influence on Asia, essentially by dangling much-needed capital for infrastructure development—an area which the Philippines is sorely lacking in. Seen as a rival to the Asian Development Bank (ADB) and the US-led World Bank, China will be accounting for as much as 30 percent of the bank’s capitalization, pegged at an initial $50 billion. In the context of the region, the AIIB is intended to fill the dearth in infrastructure need in Asia, pegged by the ADB at $8 trillion between 2010 and 2020. For the Philippines, the AIIB will mean another avenue to address its gaping infrastructure needs, especially since the AIIB is geared toward financing roads, dams and electricity grids, among other projects.

The Philippines, along with 21 other countries, signed the memorandum of understanding for the founding of the AIIB, albeit the signing was stressed by Philippine officials as a “nonbinding” commitment. True enough, during the signing of the bank’s articles of incorporation later, the Philippines bowed out along with Thailand and Malaysia. Finance Secretary Cesar V. Purisima said the country has until December to sign and is currently mulling over its options. The AIIB is being targeted to be operational by end-2015. While China pledges that the AIIB will adhere to strict and transparent standards of a multilateral lending institution, the question of what kind of governance and decision-making procedure it will adopt (especially in fund allocation) is yet to be answered. Some fear that the AIIB will give China a bigger hand in the decisionmaking on which projects will be built based on the advantage of its own industries; and choosing the recipient countries to be prioritized for projects.

n Sen. JV Ejercito: “Definitely, it will affect the relationship [with China], but we have to fight for our sovereignty. So, in this issue, I support the President for fighting for our territorial integrity.” n Sen. Grace Poe: “Ang importante, matapos muna dito iyong ating arbitration case bago tayo gumawa ng mga hakbang na ganyan. Ipagpatuloy iyan at syempre merong ibang paraan din, at huwag natin kalilimutan iyong AFP modernization. Palakasin natin ang ating military, pero kailangan din nating isipin ang ibang aspects ng bilateral negotiations kung posible.” n Senate President Franklin M. Drilon: “Well, China certainly does not like it, but our foreign policy is basically to protect our national

interest. I support the move of the government in filing the case.” n Sen. Loren Legarda: “I hope that they would accept jurisdiction of the case; that is the first step. And then, after that, of course, we would like to exhaust peaceful diplomatic means and the legal way to address the issue of the West Philippine Sea.” n Sen. Bam Aquino: “Well, syempre ayaw ng China iyan, but it is the best course for us, to raise it before the community of nations. At the end of the day, we’re not alone; we belong to a community of nations and the course of action of the Department of Foreign Affairs to raise it before the international tribunal and to get Asean to support our position, I think, is the best way to move forward.”

Opinion BusinessMirror

A6 Thursday, August 6, 2015

editorial

How Spain fixed its economy

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O economic stagnation is the new European normal, and the southern periphery the euro area’s Achilles’ heel? Spain just posted its strongest quarterly growth in eight years and predicts 3.3-percent growth for the year as a whole. Maybe there’s a lesson here. There is, but it’s a bit more complicated than “austerity works”—the message that Europe’s finance ministers and the International Monetary Fund might choose to emphasize. Fiscal control has been part of the mix, but only part. Luck had a hand, too. Most important, Spain made some brave, unpopular choices that seem to be working out. The economy suffered a crippling downturn in the financial crisis, then hobbled along until 2012 without anybody doing much about it. At that point, the government applied for a €100-billion rescue package from the European Union. The situation was grim. Spain’s real-estate bubble had burst, unemployment (a blight on Spain for years) had climbed above 25 percent, and cascading bankruptcies further undermined confidence. The yield on 10-year Spanish bonds in July 2012 ran more than five percentage points over Germany’s, prompting the European Central Bank to step in to save Spain from speculative runs on its sovereign debt. The government of Prime Minister Mariano Rajoy bowed to austerity demands, cut publicsector wages and benefits, and increased value-added tax to 21 percent (with exemptions) from 18 percent. Had he stopped there, Spain might have bumped along the bottom for a good while longer, rather than seeing the recovery it’s now enjoying. Low inflation, a cheap euro, the fall in energy prices and renewed financial stability in Europe have supported consumer spending and lifted Spain’s beleaguered retailers. Holidaymakers have favored Spain this season, too—in part because visiting Greece without bundles of cash has presented difficulties. Put much of all that down to luck. But Spain’s recovery today also owes a lot to hard reform aimed at particular failings in the economy. The Rajoy government braved street protests and the rise of an antireform left-wing opposition and persisted in a deliberate rewiring of the Spanish economy, with an emphasis on far-reaching labor-market and tax reforms. In 2014 the government said it would gradually lower the corporate tax rate to 25 percent from 30 percent. The top marginal rate on personal income will fall to 45 percent from 52 percent. The government is limiting deductions, broadening the tax base and making a serious effort to curb evasion. Companies have been given more flexibility to set wages and working conditions. Wage growth that had run ahead of productivity has moderated. The barriers that created Spain’s notorious two-tier labor market, with its underclass of workers on temporary contracts, have begun to fall. Be under no illusion: The job is far from finished. Structural unemployment—what’s left when growing demand has done all it can—might still be as high as 18 percent, more than triple the US figure. Tax and labor-market reforms need to go further. The government could do more to help to match job seekers, many of them high-school dropouts, to work or training. Above all, to avoid repeating the errors of the past, it will need to be careful about maintaining fiscal discipline as the recovery boosts revenues and financial pressure subsides. Nonetheless, Spain proves an important point: Contrary to reports, geography and euro membership condemn no country to economic failure. Bloomberg editorial Since 2005

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So, you want to be the Prez? John Mangun

OUTSIDE THE BOX

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ith two officially announced candidates to run for president in 2016—and a half dozen others who would love to be included—maybe it is time to reflect on the choices.

I am often asked who might be the best choice, and I suddenly become deaf. No matter what answer I might give, it will likely be the “wrong” one. Philippine politics has completely degenerated into a local form of the Spanish Inquisition as a battle between good and evil. Distinguishing between the two is much easier when one is named “Batman” and the other is “The Joker”. In the next few months, events are going to change the political thinking. I am sure that, after all my endless twaddle about the coming change on the global economic scene, you may conjure that this is simply a case of an old man slipping into his intellectual twilight years. Perhaps, we need to revisit history. The 2007 and onward global economic crisis was bad all throughout, but the Philippine economy managed to recover unscathed. Gross domestic product (GDP) growth tracked from

6.6 percent in 2007 to 4.2 percent in 2008, and a low of 1.3 percent in 2009. The 2010 GDP surged to a high 7.6 percent, because it was coming off a very low base—not because of government policy. For a variety of reasons, the Philippines weathered the economic storm well. However, the 1997 Asian economic crises brought out a different scenario. Between 2007 and 2010, the Philippine peso actually appreciated. But from 1996 to 1998, the peso lost 58 percent of its value against the dollar. The GDP growth rate in 1996 was 5.8 percent, followed by 5.2 percent in 1997. But 1998 saw the economy shrink by 0.6 percent, and even by 1999, the GDP was only growing at 3.1 percent. By 2003, the GDP was increasing at a 5-percent rate. It was not until 2004—or nearly seven years after the crisis hit— that we were back to a pre-crisis growth rate.

The Asian crisis started in the first week of June 1997. Fidel Ramos was president then. The next election took place in May 1998. Imagine for a moment that, instead of taking place in 1998, the presidential election had been held on May 11, 1997. One month later economic hell would break loose. The candidates for president were Joseph Estrada, Jose de Venecia Jr., Raul Roco and Emilio Osmeña. Maybe knowing that the financial crisis was just around the corner may not in any way have changed your personal voting decision or the eventual outcome of the election. But it most certainly would have changed the discussion on who might be best qualified to take the nation through the crisis. Contrary to the way the statistics are presented, the current administration was fortunate to have come to office after the bottom of the 2007 global economic crisis. The Philippine stock market was up 80 percent from the 2009 low at the time of the May 2010 election. The economy had recorded three quarters of increasing growth before the polls. That is not to diminish the administration’s efforts in any way, but it is the reality. The point is, that which worked in a rising economic trend may not be effective at all if things turn sour, as I believe that they will, and hard questions will require strong answers. So, you want to be the next president? My first question—and I have more—is, what specifically will you do

as president to bring more foreign direct investments (FDI) without changing the constitutional restrictions on foreign ownership? Here is the answer I expect: “As we improve our governance, our competitiveness and reduce corruption, more investments will come in.” The problem is that we lag so far behind our competitors for FDI, and it will take years before we can catch up with them. Maybe what we can hope for is that Thailand and Vietnam will suddenly announce, “That’s it folks. This is the least corrupt and the most competitive we are ever going to be. It is now your turn, Philippines.” Leaders have to be more than the organization’s pretty face and the manager. They have to have actually ideas for improving the “business.” Part of the problem is the Philippines’s lack of a clear objective for its FDI. Here’s my solution: fiscal incentives based on only one factor. How many full-time, regular employees does the company have? We need jobs more than capital or technology. And here is the kicker on capital formation: Philippine companies that set up separate FDI joint ventures will get the same incentives. E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.

Thailand’s generals don’t have an economic plan William Pesek

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BLOOMBERG VIEW

ilitaries tend to justify coups d’état by making assurances of political competence: The previous government failed the people, and military technocrats will now restore order, cleanse the system and get big things done.

The generals who seized power in Thailand in May 2014, however, have essentially abdicated that argument. To be sure, Prayuth Chan-Ocha and his fellow officers pledged to restore political calm, end corruption and bring happiness to tens of millions not benefiting from $373 billion of annual output. But 440 days on, Prayuth’s regime has only made things worse. Thailand’s growth is the slowest among developing nations, its exports may contract 4 percent this year, and Bangkok is the only major Asian stock market experiencing outflows. The currency is down 7 percent in six months. Thailand’s new regime has learned the hard way that running Southeast Asia’s second-biggest economy isn’t as easy its officials once thought. Prayuth’s main problem is that he lacks an economic strategy. He and his team are so preoccupied micromanaging small-scale public order issues (like ban-

ning alcohol sales near schools) that they’re neglecting the big picture. Thailand, long a manufacturing powerhouse, needs a serious fiscal jolt. Factory output has fallen every month but one since March 2013, while exports have declined every month this year. The only thing the junta is doing about it is offering spin. In a series of speeches, military leaderturned-Prime Minister Prayuth has claimed the country’s declining gross domestic product (GDP) is the product of his valiant corruption crackdown (and partly weak exports, too). “It’s because some people spend money from illegal businesses and money from fraud,” he said on June 5. “Now the government has come to set things right, causing that money to disappear.” But average Thais trying to eke out a living tell another story. As documented by my Bloomberg colleague Chris Blake on July 1, bribes demanded by public

officials and the mafia are increasing under the junta, particularly in Bangkok’s red-light districts. “Thailand’s shadow economy ranks globally among the highest,” says economist Friedrich Schneider, author of Hiding in the Shadows: The Growth of the Underground Economy. He estimates Thailand’s shadow economy was 40.9 percent of real GDP in 2014, including some illegal sectors, such as gambling and small weapons, but largely excluding drugs. Prayuth would be wise to reshuffle his Cabinet, half of which is comprised of military personnel with little experience in their portfolios. That would relieve some of the social pressure bubbling around his regime. The country’s already elevated levels of household debt are rising, as growth and wages stagnate. In the first quarter alone, outstanding household debt from commercial banks jumped 7.2 percent. But Prayuth all but admitted on July 27 that he doesn’t understand the basics of modern political leadership when he said he won’t be pressured to make changes “just because somebody is at fault or because of social pressure.” Speculation had been rife that Prayuth might tap Somkid Jatusripitak, who was deputy prime minister and finance minister in the government of former Premier Thaksin Shinawatra. But it’s hard to see how he could do that, given that the coup was aimed at running Thaksin and his sister, former Prime Minister Yingluck Shinawatra, out of politics forever.

Prayuth’s first step should be to accelerate the government’s $54-billion spending plans for roads, mass transit and other projects. Absent those improvements in infrastructure, Thailand won’t be able to keep foreign automobile manufacturers in the country, and, thus, retain its reputation as the “Detroit of Asia.” And with the Philippines already lobbying Toyota and other auto giants to relocate their Thai factories, Prayuth doesn’t have any time to lose. Prayuth also must set a clear timetable for relinquishing power. That’s a necessary first step to restoring confidence in the economy; investors tend to look askance at permanent military takeovers. Yet, the junta hasn’t even finalized a new constitution it says is required to allow Thais to cast ballots again. It is increasingly apparent that its talk of reform before elections is just a delaying tactic. The public would be forgiven for concluding the coup wasn’t about improving the lives of average Thais but grabbing power for power’s sake. When you seize power, though, it’s best to have a plan. The chronic drift and uncertainty of the last 14 months is breeding a lack of trust from the trading floors of New York to the night markets of Bangkok. It’s undermining growth, deepening poverty and increasing the odds Thailand will experience a lost decade. And as the government’s economic argument loses force, the only authority it will have left is its force of arms.

Opinion BusinessMirror

opinion@businessmirror.com.ph

For the life of the world Registration of labor organization, association Msgr. Sabino A. Vengco Jr. or workers’ union

Alálaong Bagá

Atty. Filamer D. Miguel

Tax law for business

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ection 2 of the Corporation Code of the Philippines explicitly defines a corporation as an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

On the other hand, the Tax Code, as amended, lays down a broader definition for income-tax purposes. Under Section 22 thereof, the term “corporation” shall include partnerships, joint-stock companies, joint accounts, associations or insurance companies, but does not include general professional partnerships and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the government. Generally, it is the Securities and Exchange Commission (SEC) that has jurisdiction and supervision over all corporations, partnerships or associations that are the grantees of primary franchises and/or a license or permit issued by the government. Corollary thereto, the SEC has the power to approve, reject, suspend, revoke or require amendments to registration statements, and registration and licensing applications of said entities. It must be emphasized that it is the certificate of incorporation duly issued by the SEC that shall grant juridical personality to the applicantcorporation or partnership. Upon issuance of the said certificate of incorporation, the corporation may now commence to transact business in the Philippines, except those business activities that require secondary license or permits to operate from the other government agencies. However, there is a special distinction with respect to corporations created by special laws or charters, since they shall be governed primarily by the provisions of the special law or charter creating them or applicable to them, supplemented by the provisions of the Corporation Code, insofar as they are applicable In the case of labor organizations, associations or group of unions or workers, it is governed by Presidential Decree 442, otherwise known as the Labor Code of the Philippines. Under Article 234 thereof, it is provided that any applicant labor organization, association or group of unions or workers shall acquire legal personality and shall be entitled to the rights and privileges granted by law to legitimate labor organizations upon issuance of the certificate of registration by the Department of Labor and Employment (DOLE). In particular, Article 235 of the Labor Code provides that the Bureau of Labor Relations and the Labor Relations Divisions in the regional offices of the DOLE shall act on all applications for registration. Likewise, Section 226 lays down the jurisdiction of the bureau, which states that it shall have original and exclusive authority to act on all inter-union and intra-union conflicts, and all disputes, grievances or problems arising from or affecting labor-management relations in all workplaces. In line with this, Section 236 of the Tax Code requires that every person (whether an individual, a trust, estate or corporation) subject to tax shall register with the appropriate Revenue District Office (RDO) of the Bureau of Internal Revenue (BIR). Revenue Regulations (RR) 7-2012 is the most recent consolidated regulations on primary registrations,

Since labor organizations, associations or group of unions or workers issued with DOLE Certificates of Registration have already acquired legal personality upon issuance of such certificates, it is no longer necessary for them to present SEC Certificates of Registration for their registration with the BIR. They only need to present copies of their Certificates of Registration issued by the DOLE, and their constitution and bylaws. updates and cancellation with the BIR. Annex A thereof provides the venue, BIR Forms and documentary requirements to be submitted in case of registration. Under said RR, in order for corporations/partnerships to be registered with the BIR, such entities must submit a copy of SEC Registration and Articles of Incorporation/Articles of Partnerships, as well as a copy of Mayor’s Business Permit or duly received Application for Mayor’s Business Permit, if the former is still in process with the local government units. For purposes of compliance, certain labor associations, organizations and unions tried to register with the BIR presenting, among others, the Certificate of Registration issued by the DOLE, but some RDOs refused to register these groups in the absence of a Certificate of Registration issued by the SEC. In view of this apparent confusion, the commissioner of internal revenue issued on July 24, 2015, Revenue Memorandum Circular 41-2015, which clarified the documentary requirements necessary for the registration of labor organizations, associations, or group of unions or workers under Section III (C) of Annex A of RR 7-2012. As it now stands, since labor organizations, associations or group of unions or workers issued with DOLE Certificates of Registration have already acquired legal personality upon issuance of such certificates, it is no longer necessary for them to present SEC Certificates of Registration for their registration with the BIR. They only need to present copies of their Certificates of Registration issued by the DOLE, and their constitution and bylaws, without requiring SEC registration. This clarificatory issuance, which shall take effect immediately, is more in line with the provisions of the Corporation Code, the Tax Code and the Labor Code. The author is a senior associate of Du-Baladad and Associates Law Offices, a member-firm of World Tax Services Alliance. The article is for general information only and is not intended, nor should be construed, as a substitute for tax, legal or financial advice on any specific matter. Applicability of this article to any actual or particular tax or legal issue should be supported, therefore, by a professional study or advice. If you have any comments or questions concerning the article, you may e-mail the author at filamer.miguel@bdblaw.com.ph or call 403-2001, local 360.

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he psalmist knows that the praise of the Lord will be ever in his mouth, because anyone can taste and see how good the Lord is (Psalm 34:2-3, 4-5, 6-7, 8-9). Jesus said, “I am the living bread that came down from heaven...and the bread that I will give is my flesh for the life of the world” (John 6:41-51).

Taste and see how good the Lord is The psalmist starts off with an overflowing praise to God and proclaiming the appropriateness of blessing God at all times and with his whole being. He takes leave to glorify the Lord as, though, in an assembly at worship where other lowly ones (the anawim), who trust and depend on the Lord, are gathered and can hear and be glad. The witness by the psalmist becomes an invitation to others to join him in rejoicing and extolling the name of the Lord. Without giving details, the psalmist confesses that he was in distress and when he turned to the Lord, he was rescued. This is the reason he glorifies God and bids others to do likewise. The others are encouraged to look to the Lord, so that they too may rejoice in gratitude and their faces may be radiant with joy and not covered with shame. One’s dignity and state

is mirrored and expressed on one’s face, as we think of Moses’ face radiant with divine light (Exodus 34) after his 40 days of contemplation on Mount Sinai. In our affliction, let us turn to the Lord and call out to Him, and He will hear us and save us, as is illustrated by the case of the psalmist. An additional image is that of the angel of the Lord who encamps around those who fear God and protects them from all perils. Indeed, blessed is the man who takes refuge in the Lord. We are all encouraged to taste God’s goodness and to experience how delightful and satisfying it is.

Drawn to Jesus by the Father

The Jews, those who found it difficult to accept Jesus, complained and smoldered within themselves because Jesus said He is the bread come down from heaven. They saw a contradiction in Jesus’ claim of

Thursday, August 6, 2015

heavenly origin, considering that they knew well enough His Father and mother and, therefore, His human origin. Jesus was not surprised at His opponents’ lack of understanding and outrage at Him, and He stressed even more His origin from above. No one can come to Him, unless His heavenly Father draws the person to Him. Those who do not come to Jesus as the bread of life are clearly not led by the Father. But those who are led to Him by the Father, Jesus will raise from the dead on the last day, sharing in the resurrection to new and eternal life. The people who believe in the one sent by the Father listen to the word of God and learn from it. They are all taught by God himself, quoted Jesus from the prophet (Isaiah 54:13). They are open and ready, even if they have not seen the Father in the way that the one close to the Father’s side/heart (John 1:18) has. In the divine plan, this heartmate (kapuso) who is from God has made God known as His Father, and those who long for the truth seek this great revelation of the relationship between Jesus and the Father and the mutuality of their action to draw people into their communion of life.

people to eat the bread of life, to enter into His circle of life and share in His loving relationship with the Father. This kind of nourishment is altogether different from the manna of old in the wilderness, which, though sent by God, was an earthly food for the sustenance of earthly life. Those who ate the manna nonetheless died. As the living bread from heaven, Jesus is the source of eternal life coming from God’s very self for the life of the world, so that those who eat of it may not die. As the bread of life from heaven, Jesus assures those who eat it that they will live forever. Then He identifies that it is His flesh that He will give as the bread for the life of the world. To give His flesh means to sacrifice His own human life; He will offer His life so that the world may have eternal life. Alálaong bagá, in offering Himself in the Eucharist as the marvelous living bread from heaven for the life of the world, Jesus introduces us to a new life through death. As He entered into and went beyond death to make us taste the goodness of the Lord and give us participation in the divine life, we who believe and eat of this bread are called to die in order to rise with Him to everlasting life.

Jesus reasserts with full power His central teaching that He is the bread of life and whoever believes in Him has eternal life. His concern is for

Join me in meditating on the Word of God every Sunday, 5 to 6 a.m. on DWIZ 882, or by audio-streaming on www.dwiz882.com.

I am the living bread from heaven

PNP solidarity is best anticrime weapon Ariel Nepomuceno

DECISION TIME

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he Philippine National Police (PNP) must faithfully adopt and live by its cardinal principle that the entire institution will be solidly mobilized in case anyone of them is harmed or attacked, especially in the performance of their duty to serve and protect the public. The brutal killing of Senior Police Officer 1 Armando Garcia a few days ago is another case that will be included in the statistics of police officers slain by criminals. We have already lost count of the number of lives lost among the ranks of our policemen, who were murdered by outlaws who still roam our streets. There is neither outrage nor significant alarm to protest and condemn this crime committed against those who are mandated to combat criminality. Sadly, our society seems to have resigned itself to the reality that this is a normal risk that goes

with the difficult job of an underpaid and hardly appreciated uniformed civil servant.

Challenge to the PNP leadership

The PNP as an institution must forge a fundamental doctrine that will be truly embraced by each of its members, wherein mutual protection shall be assured, particularly when the extreme scenario of being killed in the performance of duty unfortunately happens. This means that the PNP will do everything legal at its disposal to pursue the killer(s). This assurance of justice will

probably render a higher level of inspiration to the policemen who encounter extreme versions of danger everyday so that ordinary citizens can enjoy their normal and peaceful lives. More important, lawless elements will get the strong message and will probably think a hundred times before doing something that would harm a police officer for fear of just retaliation.

Concrete programs

This can be a call for the new PNP Chief, Director General Ricardo Marquez, who is well known for his impressive record in the field of operations. A serious no-nonsense officer, who immediately directed his people to be significantly visible in the community, Marquez gives us concrete signs to expect the institution to improve. Therefore, the risk that police officers will inevitably be exposed to increases. Maybe the new chief can formally create a unit in the Criminal Investigation and Detection Bureau (CIDG) that will be concerned only with the job of tracking down criminals who have the gumption to attack or kill

police officers. The performance of this special unit will be measured on the basis of cases that are resolved. It will relentlessly make the criminals accountable. The top leadership must also formulate a system of appropriately rewarding the members of PNP. Many of them still suffer from serious financial constraints.

The ranks must be assured

Incumbent to the job of our police officers is the danger that could hardly be avoided. Still fresh on our collective memory is the fate of the SAF 44 heroes. Hence, similar to the creed of the Marines that “nobody will be left behind,” the PNP must inculcate on each member that the organization will ensure that until the end, any tragedy that may happen to anyone of them will be appropriately handled by those who are left behind to continue serving the country. Ultimately, the internal solidarity amongst the members of the PNP will contribute to improving its capability to win the war against lawlessness and criminality.

China hopes to defy history of market bailouts By Megan McArdle Bloomberg View

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hina’s stock market has had a spot of trouble lately. Perhaps, you’ve heard? You may also know that the Chinese government has intervened heavily to try to prevent a financial panic. And yet, as the Wall Street Journal notes on Wednesday, the stock market remains well off its peak. Whether Beijing’s policy has “worked” is somewhat subjective; if you think that financial panic was imminent, then maybe it has. But even if you think that the government’s policies have prevented a disaster, you still have to ask whether they can actually sustain a recovery. Organized support of the market is not a new idea, and history suggests that sometimes it does work. JPMorgan famously assembled a group of financiers (with some government help) to prevent the market from collapsing during the Panic of 1907, and this does seem to have staved off some panic. Similarly, the Hong Kong government seems to have made some difference in the Asian market crisis of the late 1990s. The Fed organized interventions in cases like Long Term Capital Management that I think can legitimately be said to have stopped some sort of widespread panic.

And yet, even these examples —the ones that “worked”—aren’t exactly a shining testimony to the power of intervention in the stock markets. The Hang Seng had fallen by two-thirds by the time the government managed to stem the decline. The US market that Morgan and friends “saved” fell more than 40 percent from its peak before stabilizing. And then there are the interventions that really, really didn’t work. The US tried organized support of the stock market again during the Great Depression, and the ultimate result was that, as John Kenneth Galbraith would later write, “Support, organized or otherwise, could not contend with the overwhelming, pathological desire to sell.” The Japanese government tried to save the Nikkei, and it eventually bottomed out at around 60 percent off its peak (though it would continue to plumb further bottoms as the “lost decade” stretched over more than 20 years). What lessons do we learn from this history? The first is that support works best when you have some sort of a limited situation, as with the collapse of Long-Term Capital Management or the Knickerbocker Trust Co., where you are essentially trying to limit the ripples from a single event. As long as the support is bigger than the failing entity, the

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intervention will probably work. But what if the problem is larger than a single shock? What if the whole market is unstable because naïve or greed-maddened investors have bid up the prices of assets to levels that cannot be supported by the underlying economic activity? In that case, support seems to at best stave off the inevitable market correction— perhaps, prolonging the pain. Of course, ordinary rules don’t always seem to apply to China. Visiting a few years back, I was struck by how ripe the Chinese banking system seemed for collapse—and how hard it was to define the conditions under which such a collapse would happen. The government exercises control at so many levels that I wasn’t even sure whether you could call the Chinese banking system a banking system in any traditional sense, so it’s even trickier to map out the normal routes by which banking crises occur. It seemed possible for the government simply to declare by fiat that the banks were sound, and make it so by sheer force of will. Possible. But it probably can’t do the same with the stock market. Could Beijing simply declare the prices on the stock market to be whatever the government wants—and commit funds as needed to make it so? Sure. But it wouldn’t end there.

Having the government buy up all the shares would sort of obviate the point of having a stock market; a Potemkin asset pool obviously does not further the purposes for which the exchange was initially established. Obviously, the actual idea is to stop well short of that point, using various levers and pulleys to “restore confidence” in the market, or if you prefer, “to create the appearance of confidence.” The Chinese government has been unusually open about its drive to keep the stock market high, and presumably the idea is to give the markets co nfidence that the government will not let things get out of hand, in much the same way that the Fed and the Treasury strove to restore confidence in the US banking system during the 2008 meltdown. Frothy asset markets are ultimately driven by the “greater fool theory”: I buy an overpriced asset because someone stupider will come along to buy it from me at an even higher price. They collapse when the greatest fool buys at the peak price, and everyone realizes they’d better run for the exits. By being so open with its support, the Chinese government is essentially positioning itself as the greatest fool. And since the government has an enormous amount of money and power, and considerable trust from Chinese citizens, that may work.

2nd Front Page BusinessMirror

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briefs

2016 natl budget inclusive, sustainable–legarda Sen. Loren B. Legarda, the new chairman of the Senate Committee on Finance, vowed to make the 2016 national budget inclusive and attuned to the country’s sustainable development goals. “I have been entrusted with the task to chair the Senate finance committee and I accept the duty with the goal of ensuring that the 2016 national budget will be inclusive, which means that the government will fund programs not only for economic development but also for the growth of every citizen; not only to create progressive communities but also to build resilience; not only to reduce poverty but also to promote sustainability,” Legarda said. She said that the 2016 national budget should already be attuned to the Sustainable Development Goals, which will succeed the Millennium Development Goals when it expires at the end of 2015. Recto Mercene

house panel oks bill granting discount to underprivileged students

The House Committee on Higher and Technical Education has approved for plenary debate a bill granting discount on books and school supplies to underprivileged students. Rep. Roman T. Romulo, chairman of the committee, said the passage of the bill would ease the financial burden of underprivileged students and help them cope with the high cost of education. The authors of House Bill 5902 are Reps. Cinchona Cruz-Gonzales (Party List, CIBAC), Bellaflor J. Angara-Castillo (Lone District, Aurora), Marcelino R. Teodoro (1st District, Marikina City), Romulo (Lone District, Pasig City), and Czarina D. Umali (3rd District, Nueva Ecija). The proposed “Underprivileged Higher and Technical Students’ Discounts Act” grants 5-percent discount to students in buying books, school supplies, food and medicines. The bill will cover the students who are enrolled in post-secondary nondegree technical-vocational courses and those enrolled in Bachelor’s Degree Programs at the college level, post secondary nondegree technical-vocational course. PNA

SC: Ecozone petroleum imports subject to VAT and excise taxes

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By Joel R. San Juan

HE Supreme Court (SC) has junked the petition filed by Clark Freeport Zone investors and locators to stop the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) from implementing a revenue regulation that which imposes value-added tax (VAT) and excise tax on the importation of petroleum and petroleum products from abroad into the economic zones. In an 11-page decision penned by Associate Justice Martin S. Villarama Jr., the Court’s Third Division held that the petition, filed by the Clark Investors and Locators Association (Cila), should be dis-

FEAST OF THE TRANSFIGURATION OF JESUS Eternal Gardens inspires devotion among the faithful

missed outright due to its “serious and technical defects.” The petition accused the DOF and the BIR of acting with grave abuse of discretion in issuing Revenue Regulation (RR) 2-2012, as

By Claudeth Mocon-Ciriaco

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N official from the social action arm of the Catholic Bishops’ Conference of the Philippines on Wednesday expressed alarm on the possible use of the government’s Supertyphoon Yolanda (international code name Haiyan) funds in 2016 elections. According to Nassa/Caritas Philippines Executive Secretary Fr. Edwin Gariguez, recent studies showed that the Aquino administration may have deliberately prolonged fund releases under the Comprehensive Rehabilitation and Recovery Plan (CRRP) for Yolanda. “Ang problema po dito darating ang 2016. Kailan nila ilalabas ang pondo? Naghihintay ba sila ng 2016? Ang nakakalungkot dito, baka hinihintay ang 2016 bago ilabas ang pondo. ’Yun ang di maganda. Baka hinihintay ang 2016 para ipamudmod itong malaking pera na ito. ’Yan ang hindi dapat mangyari,” Gariguez said. He cited data from a recent study by Nassa/Caritas Philippines, Development and Peace and other advocacy groups, which showed

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THE Transfiguration of Jesus

Quezon City is enthusiastically spearheading efforts at the parish level to propagate devotion to the Transfiguration of Jesus, the second most important event in His public life, next to His resurrection. Established more than 30 years ago, the parish is now a thriving and vibrant Christian community in Barangay San Roque, an area near Camp Aguinaldo and Cubao. Supporting their efforts, Eternal Gardens is unique in being the only secular institution that is an active partner of the church in propagating and strengthening the devotion to the Transfiguration event by embracing the image as its corporate symbol of excellence. Besides Baesa and Cagayan de Oro, other places where the Transfiguration image has become a familiar presence as it looms over Eternal Gardens

branches are Dagupan City, the second to open after Caloocan; and the cities of Biñan in Laguna, Lipa, Batangas, with two branches in Barangay Balagtas and Concepcion; Naga, Cabanatuan and Santa Rosa. In these branches, the observance of the Transfiguration feast today coincides with their celebration of the 39th anniversary of Eternal Gardens. The company Head Office celebrates the anniversary five days later, or on August 11, the date of the official launch of Eternal Gardens in 1976. By embracing the Transfiguration as its symbol, the company affirms the people’s faith in life eternal where the truth and beauty of God’s love is finally revealed to mortals. This is the meaning of its corporate slogan of “a glimpse of heaven on a patch of earth.”

it unilaterally revoked the tax exemption granted by Republic Acts 7227 and 9400 to the businesses and enterprises within the Subic Special Economic Zone and Clark Freeport Zone. But the Court of Appeals (CA) agreed with the Office of the Solicitor General that the petition must be denied, since the special civil action for certiorari filed by the petitioner cannot be used to assail RR 2-2012, which was issued by the DOF and the BIR in the exercise of their quasi-legislative or rule-making powers. The appellate court noted that for special civil action for certiorari to prosper, it must concur with the requisites, such as it must be directed against a tribunal, board or officer exercising judicial or quasi-judicial functions; the tribunal, board or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and there is no appeal or any plain, speedy and adequate remedy in the

ordinary course of law. However, the CA pointed out that the DOF and the BIR do not fall within the ambit of a tribunal, board or officer exercising judicial or quasi-judicial functions. “Second, while this case is styled as a petition for certiorari, there is, however, no denying the fact that, in essence, it seeks the declaration by this Court of the unconstitutionality and illegality of the questioned rule, thus, partaking the nature, in reality, of one for declaratory relief over which this Court has only appellate, not original, jurisdiction,” the CA ruled. “Accordingly, the petition must fail because this Court does not have original jurisdiction over a petition for declaratory relief even if only questions of law are involved,” it added. Furthermore, the CA said Cila failed to allege exception and compelling circumstances that would warrant direct filing of the petition before the CA instead of bringing it first before the trial court.

Nassa/Caritas exec questions ‘sluggish’ release of Yolanda rehabilitation, reconstruction funds Correspondent

By Lizzie Radam Lazo elebrating its 39th anniversary this year in the memorial business, Eternal Gardens carries on with its self-assumed task of promoting awareness of and devotion to the Transfiguration of Jesus. First exhibited in the company’s maiden park in Baesa, Caloocan City, a famed landmark at the entrance to the North Luzon Expressway, the iconic statue now also looms over nine other parks in key areas in Luzon, with the newest found in the company’s 10th park in Cagayan de Oro City. Today Eternal Gardens joins Christians worldwide in celebrating the Feast of the Transfiguration of Jesus, a biblical event that, the faithful believe, was meant to strengthen the faith of His apostles as the time of His earthly death approached by giving them a foretaste of His resurrection. According to accounts in three of the four Gospels (Matthew 17:1-9; Mark 9:2-8; and Luke 9:28-36), Jesus took the apostles Peter, James and John with Him up on a mountain known as Mount Tabor, and while they were there, He was shown with Moses and Elijah in all glory and majesty. He was transfigured, His face shone like the sun, and His garments became glistening white, a preview of His resurrection. Of the thousands of churches all over the country, only a handful are dedicated in honor of the Transfiguration. The oldest of these is the Cathedral of Our Lord’s Transfiguration in Palo, Leyte, set up in 1596, just a year after the arrival of the Jesuits in 1595. Early this year the church made news as it was visited by Pope Francis when he went to Eastern Visayas to comfort the victims of Supertyphoon Yolanda (international code name Haiyan). Others include the Monastery of the Transfiguration in Malaybalay, Bukidnon, one of the most visited religious communities in the country; the Transfiguration Chapel at the Caleruega Retreat House, which is a favored venue for weddings and other spiritual exercises; the Church of the Transfiguration of Our Lord in Cavinti, Laguna; and the Transfiguration Parish in Angeles City. Right in Metro Manila, the Transfiguration of Our Lord Parish in

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that only P73.51 billion, or 41.61 percent, of the total P170-billion funding requirements have been released as of March. The study further showed that only P2.4 billion of the targeted P26 billion for social services was funded in 2014. This is apart from the P13.6 billion released for resettlement of the required P75 billion, P2.4 billion of the P26 billion for target social services; P9.8 billion of the P33-billion fund for livelihood; and P21.5 billion of the P35-billion budget for infrastructure. Gariguez also pointed out the lack of transparency on how the funds for Yolanda were used. A report from the Department of Budget and Management showed that the budget for the Yolanda reconstruction is shared with other rehabilitation efforts for other calamities, such as the Bohol earthquake. “This is another cause for concern. Why do they have to mix up the funds for the rehabilitation efforts of different calamities? This is a clear disregard of basic accounting principles. Again, this clearly shows the government’s ‘super inefficiency,’” Gariguez lamented.

The priest also raised alarm over the indebtedness incurred by the government, as the “financial requirements of the rehabilitation have become the government’s pretext in accessing loan obligations with multilateral financial institutions.” So far, the government has incurred a total of P126.2-billion debt. “These are the issues that we want President Aquino to clarify during his last State of the Nation Address. Unfortunately, this did not happen,” he added. As of 2014, the government has only completed 2,100 houses for Yolanda victims, which is very way below the much-needed and targeted 205,128 shelters. Nassa/Caritas Philippines is currently heading the Catholic Church’s largest three-year rehabilitation program for Yolanda survivors called REACHPhilippines, which amounts to P816.96 million in the first year alone of the program implementation. In 2014 it was able to construct 3,117 houses for typhoon survivors of the nine worst-hit provinces. For the second year, it will continue to build more houses and provide various interventions, which they would be announcing this week.

Out-of-pocket health expenses of Filipino households reached P296.5B in ’13—PSA By Cai U. Ordinario

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ilipino households spent P296.5 billion for out-of-pocket health expenses in 2013, according to the Philippine National Health Accounts (PNHA) recently released by the Philippine Statistics Authority (PSA). The PSA data showed that this represented 56.3 percent of the total health expenditure, worth P526.3 billion, in 2013. “This figure represents an improvement from 57.2 percent in 2012, but remained relatively high compared with the 45 percent HCFS [Health Care Financing Strategy] target of [the] DOH [Department of Health],” the PSA said. Data also showed that per capita health expenditure at current prices was registered at P5,360 in 2013, a 9.8-percent increase from P4,881 in 2012. The PSA said that at constant 2006 prices, per capita health spending rose by 6.6 percent to P4,000 in

2013, from P3,752 in 2012. Due to this, the government missed its target of reducing outof-pocket health expenditures to 45 percent in 2013. The government also missed its target of increasing government spending on health as a percentage of total government spending. The DOH target in 2013 was 6 percent, but the government's spending for health remained at 4.9 percent in 2013, the same level in 2012. Further, the target of increasing local government spending for public health as a percentage of total health expenditure was also missed. The 2013 target was set at 11 percent. However, local government spending for public health as a percentage of total health expenditure decreased to 7 percent in 2013, from 7.3 percent in 2012. In terms of actual local spending for public health, local governments spent only P16.6 billion in 2013, which is P12.4 billion short of the P29-billion target.

Philippine Health Insurance Corp. (PhilHealth) spending as a total percentage of total health expenditure was also lower than the target of 19 percent. The actual PhilHealth spending as a total percentage of total health expenditure in 2013 was only 11.5 percent. The PNHA presents information on how much is spent on health-care goods and services and who is paying them. The information provide insights on the efficiency and effectiveness of health-care financing system; help determine appropriate interventions to delivery of health care; and provide inputs to evaluation of health programs. The data can also help determine whether the aggregate health-care spending from all sources—that is, the government, the social insurance sector, the private sector and the rest of the world—is adequate to meet minimum requirements and identify probable areas of inefficiencies in allocating health-care resources.